Guide

Pay - an overview of obligations

Guarantee pay - entitlement

Under certain circumstances, you may have to pay your employees a guarantee payment if you cannot provide them with employment on a day when they would normally work for you under their contract of employment.

This is to compensate for the loss, through no fault of their own, of what they would have earned in normal circumstances.

Entitlement to guarantee pay

Individuals are entitled to guarantee pay if they meet the following conditions:

  • they are an employee, ie they are working under a contract of employment - see employment status
  • they are not an excluded employee, as defined below
  • they have worked for at least one month's continuing employment up to the day before the one that guarantee payment is being claimed for
  • they have normal working hours and are normally required to work in accordance with their contract of employment
  • the day they claim for is not a day they were on holiday, were sick or not required to work under the contract of employment
  • they must not have worked at all on what would be a normal working day (a day being the 24-hour period from midnight to midnight)
  • the absence of work was not caused by industrial action, involving any of your other employees or employees working for your subsidiary or parent company
  • the reason they did not work is because there was a recession in the employer's business or anything else disrupts the normal working of the employer's business, for example a natural disaster or failing power supply
  • they have not unreasonably refused an offer from you of suitable alternative work - this can be work other than what they normally do
  • they have complied with any reasonable requirements imposed by you to ensure their services are available

Excluded employees

You do not have to pay guarantee pay to excluded employees. These are:

  • masters and crew members involved in share fishing who are paid solely by a share in the profits or gross earnings of a fishing vessel
  • members of the police service and armed forces